Highlights a Successful Year with U.S. IPO Listing and 30% Increase in Contracts
ZHUHAI, CHINA / ACCESSWIRE / June 29, 2020 / Powerbridge Technologies Co., Ltd. ("Powerbridge" or the "Company") (NASDAQ:PBTS), a global trade software applications and technology services provider, today announced its financial and operating results for the year ended December 31, 2019. The Company's 20-F filing for its year ended December 31, 2019 was filed with the U.S. Securities and Exchange Commission on June 24, 2020.
Key Financial Highlights for 2019
- Revenues $20.1 million.
- Gross profit of $6.1 million.
- The Company successfully consummated its IPO of 1,750,000 Ordinary Shares at a price of $5.00 per share, raising total gross proceeds of approximately $8.75 million.
- Cash balance of $5.7 million at December 31, 2019.
Key Business Highlights for 2019
- Increase of 18.8.% in contract amount.
- Awarded Contracts of various Powerbridge Smart Solutions for multiple regional regulated zones for international trade.
- Launched Big Data Risk Monitoring Platform and Blockchain Cross Border Compliance Platform at Nanning Customs.
- Launched Smart Big Data Platforms in new geographical markets, such as Chongqing. Guangdong and Guizhou.
- Participated at the Asian Logistics and Maritime Conference.
- Demonstrated Powerbridge Smart Port Platform with Strategic Partner Huawei at The Smart China Expo.
- Expanded into new markets in Hefei, Chengdu, Ningbo and Chongqing.
Ban Lor, Co-Chairman and Co-Chief Executive Officer of Powerbridge, commented, "2019 was a successful year in regards to our technology innovation and successful U.S. IPO listing. We invested heavily in both our technology development and capital markets efforts, which we believe set us up for success in the years to come. We incurred an extra $2.5 million expense this past year for our U.S. public listing and expansion into international markets. Our technology team developed and launched new products and services to address the pain points and inefficiencies in global trade compliance, logistics and operations. We are confident that we will return to growth mode once the Covid-19 global pandemic subsides. Additionally, we have embarked on an accretive acquisition strategy and have identified several potential targets. We also look forward to increasing our awareness and communications with shareholders by returning to the U.S. to meet with investors for a non-deal roadshow."
Stewart Lor, President and Chief Financial Officer of Powerbridge Technologies, commented, "In regards to our business operations, it is important to note that no contracts have been cancelled due to the Covid-19 pandemic. However, our business was and has continued being adversely impacted by the outbreak of Covid-19 and our movements remain partially restricted to prevent the second outbreak of Covid-19. Some of our partners and customers had deferred existing and new business, with contracts being pushed out several months. As a result, we have reduced our employee headcount by about 20% as well as identified and implemented additional operating efficiency measures, with our eyes on a return to profitability. Despite of Covid-19, we will continue to grow and optimize our products and services to better serve the emerging needs of the industry. "
We currently derive our revenues from three sources: (1) revenue from application development services generated from Powerbridge System Solutions, which require us to perform services including project planning, project design, application development and system integration based on customers' specific needs. These services also require significant production and customization; (2) revenue from consulting and technical support services primarily generated from Powerbridge System Solutions, and (3) revenue from subscription services generated from Powerbridge SaaS Services.
Our corporate and government customers include (i) international trade businesses and manufacturers, (ii) government agencies and authorities, and (iii) logistics and other various service providers. During the year ended December 31, 2019, we generated revenue from a total of 488 customers, of which 312 are international trade businesses and manufacturers, 29 are government agencies and authorities, and 147 are logistics and other service providers.
For the year ended December 31, 2019, our total revenue was approximately $20.1 million as compared to $23.2 million for the year ended December 31, 2018. The Company's total revenue decreased by approximately $3.1 million, or 13.2%. The overall decrease in total revenue was primarily attributable to $4.3 million decrease in revenue from application development services, in which, 6.8% of revenue from application development services service is attributable to the Company's SaaS and big data analysis related application development services in fiscal 2019, which was decreased from 15.6% in fiscal 2018.
The Company's application development service contracts are primarily on a fixed-price basis, which require the Company to perform services including project planning, project design, application development and system integration based on customers' specific needs. These services also require significant production and customization. Revenue from application development service is recognized as work is performed based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligations.
The Company is focusing on developing global trade applications and solutions equipped with the Company's new technology in SaaS platform, Big Data, AI and IoT applications and BaaS platform. The Company believes new technology development is the key driver for the Company's future growth. In 2019, our revenue related to deploying our new technology including SaaS and big data analysis services accounted for 14.8% of our total revenue (or approximately $3.0 million) compared to 17.4% of our total revenue (or approximately $4.0 million) in fiscal 2018.
For the year ended December 31, 2019, our application development service revenue was approximately $15.7 million as compared to $20.0 million for the year ended December 31, 2018. The decrease in application development service revenue was approximately $4.3 million or 21.5% due to less projects completed in fiscal 2019 and reduced individual project size. In certain application development service arrangements, the Company sold IT equipment prior to the delivery of the services. Such revenue was $1,554,428 in fiscal 2019, significantly decreased from $8,069,594 of related revenue in fiscal 2018. In addition, in fiscal 2019, 6.8% (or approximately $1.1 million) of revenue from application development service were related to SaaS platform development and big data analysis applications, comparing to 15.6% (or approximately $3.1 million) of the related revenue in fiscal 2018. Despite to the temporary slowdown in SaaS platform and big data analysis related application development service revenue in fiscal 2019, we intend to continue investing for long-term growth in the SaaS development and big data analysis market and we plan to continue to expand our ability to sell our applications by investing in product development and customer support to address the business needs of local markets and continuous growth for these services.
Revenue from consulting and technical support services is primarily comprised of fixed-fee contracts, which require the Company to provide professional consulting and technical support services over contract terms beginning on the commencement date of each contract, which is the date its service is made available to customers. Billings to the customers are generally on a monthly or quarterly basis over the contract term, which is typically 12 to 24 months. The consulting and technical support services contracts typically include a single performance obligation. The revenue from consulting and technical support services is recognized over the contract term on a straight-line basis as customers receive and consume benefits of such services.
For the year ended December 31, 2019, our consulting and technical support service revenue was approximately $3.3 million as compared to $2.4 million for the year ended December 31, 2018, representing an increase of $0.9 million or 38.3%, which was due to more technical consulting services requests from our existing clients. In addition, by providing application development services, we gain extensive understanding and knowledge of each customer's unique business needs, often resulting in opportunities for us to cross-sell our consulting and technical support services.
Revenue from subscription services is comprised of subscription fees from customers accessing the Company's software-as-a-service applications. The Company's monthly or quarterly billing to customer is on the basis of number of uses or the actual usage by the customers. The subscription services contracts typically include a single performance obligation. The revenue from subscription services is recognized over the contract term on a straight-line basis or based on the actual usage as customers receive and consume benefits of such services.
For the year ended December 31, 2019, our subscription service revenue was approximately $1.1 million as compared to $0.7 million for the year ended December 31, 2018. We introduced our SaaS subscription services in fiscal 2016 and continue to expand the scope of our services and enhance the features and functionalities of our applications and improve our marketing efforts, we expect our subscription service revenue will grow with an expanded offering and increased market awareness.
About Powerbridge Technologies Co., Ltd.
Powerbridge Technologies Co., Ltd. (NASDAQ: PBTS) is a provider of software applications and technology solutions and services to corporate and government customers primarily located in China. Founded in 1997, Powerbridge pioneered global trade software applications with a vision to make global trade operations easier for customers. Since inception, Powerbridge has continued to innovate and deliver solutions and services to address the changing needs of thousands of customers. Powerbridge's mission is to make global trade easier by empowering all players in the ecosystem. For more information, visit www.powerbridge.com/en
Forward Looking Statements
No statement made in this press release should be interpreted as an offer to purchase or sell any security. Such an offer can only be made in accordance with the Securities Act of 1933, as amended, and applicable state securities laws. Certain statements in this press release concerning our future growth prospects are forward-looking statements regarding our future business expectations intended to qualify for the "safe harbor" under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding our ability to raise capital on any particular terms, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, our ability to realize revenue from expanded operation and acquired assets in China and the U.S., our ability to attract and retain highly skilled professionals, client concentration, industry segment concentration, reduced demand for technology in our key focus areas, our ability to successfully complete and integrate potential acquisitions, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our Form 20-F and other filings that we may make with the United States Securities and Exchange Commission in the future. These filings are available at www.sec.gov. Powerbridge may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. In addition, please note that any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of the date of this press release. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.
For more information, please contact:
Powerbridge Technologies Co., Ltd.
President and Chief Financial Officer
Email: [email protected]
SOURCE: Powerbridge Technologies Co., Ltd.